Malawi Community Energy Sustainability Extension Market Assessment Training 20 th 22 nd January 2016 Lilongwe Productive Use of Solar PV Aran Eales
Contents Context Introduction and Definition Benefits of Productive Use Restrictions and Challenges Examples and Case Studies
Applications of Solar PV, Benefits and Drawbacks
Context large potential 10 million diesel gensets serving base loads in sunny regions of the world 2 million villages within 200km of the equator have neither grid nor access to fossil fuels A large potential for PV stand-alone and hybrid systems Jon Persson - 2015
PV Applications Pico Solar Products Solar Home Systems Grid Connection Lighting Cooling Professional Service
Pico Solar Systems
Solar Home Systems
Benefits of PV Modular scalable Good solar resource in Malawi Prices reducing Low maintenance compared to Wind, Hydro or Diesel Low C0 2, Low other emissions
Solar modules are becoming cheaper...
...as more are being installed
Challenges with PV Deployment High upfront costs May not be suitable for applications on a largescale (e.g. machines for industrial manufacturing processes), because of the high costs Especially in emerging economies with limited purchasing power and a lack of suitable financial products Business models play an important role in all cases. Development of a business model is not a simple task but often requires long preparation time and a lot of devotion to details. Business models evolve over time and there is a lot of creativity required from entrepreneurs to develop suitable packages for PV products
Productive Use of Energy
Levels of Electricity Use
Productive Use Definition one that involves the application of energy derived mainly from renewable resources to create goods and/or services either directly or indirectly for the production of income or value. The production of income or value is understood to be achieved by selling products or services at greater than their cost of production, resulting in an increase in the net income of the enterprise or the entrepreneur. https://energypedia.info/images/5/53/productive_use_of_pv_bangladesh.pdf
Benefits of PUE with Renewable Energy Triple Bottom Line Sustainable Business Stronger local economy Local impact: Jobs & increased purchase power Improved health and sanitation: Stronger socio-economic development Contribution to SE4All and SDGs: Environment and climate change
Energy Services Income Generating Value Renewable Energy Services Irrigation Better yields, higher value crops, greater reliability, growing during periods when the market prices are higher Wind, PV solar, biomass, micro-hydro Illumination Reading, extending operating hours Wind, PV solar, biomass, micro-hydro, geothermal Grinding, milling, husking Drying, Smoking (Preserving with process heat ) Create value-added product from raw agricultural commodity Create value-added product, preserve product to enable selling in higher-value markets Wind, PV solar, biomass, micro-hydro Biomass, solar heat geothermal Expelling Produce refined oil from seeds Biomass, solar heat Transport Reaching markets Biomass (biodiesel) TV, radio, computer, internet, telephone Battery charging Refrigeration Entertainment businesses, education, access to market news, coordination with suppliers and distributors. Wide range of services for end-users (phone charging business) Selling cooled products, increasing the durability of the products Wind, PV solar, biomass, micro-hydro, geothermal Wind, PV solar, biomass, micro-hydro, geothermal Wind, PV solar, biomass, micro-hydro
Economic and social benefits of PUE Rural electrification projects with a productive use component are more likely to achieve economic development and sustainability: Obtaining financing for Renewable Energy Technologies (RET) may be easier as rural financing agencies might be more willing to provide lending to households that use the provided energy to increase their income. As people s incomes rise through the productive use of energy, their demand for energy services is likely to rise too. This creates attractive market conditions for RET dealers and vendors
How to support productive use of electricity? The provision of electricity alone does not necessarily lead to its productive application The most important preconditions for productive applications of electric energy in developing countries: Knowledge and skill by small and micro-business, households and farmers on how to use new-found electrical and motive power for profitable enterprise. Technical and financial management capacity of small and microbusiness, house-holds and farmers, including availability of credit and micro-credit to finance productive tools and equipment. Where one or several of these factors are nonexistent, productive use of electricity may be hampered significantly.
How to support productive use of electricity? A policy and institutional environment conducive to business development, willingness to promote decentralized services, etc. Access to markets for additional or new products produced or services offered as a result of new electrical, heat or motive power Availability of a minimum of other complementary infrastructure services, such as transport, water supply and ICT services. Where one or several of these factors are nonexistent, productive use of electricity may be hampered significantly.
Case Studies and Examples
Case Study: Phaesun GmbH Horn Renewables Business Opportunities with Solar Systems in Somaliland Project description Solar mobile phone charging stations were developed and set-up in different locations in Somaliland. LED lamps with integrated battery (lithium lamps) were rented to be charged again at the charging station. lighting in private households, illumination of salt fields in coastal communities, (where people usually after sundown) Solar cooling and freezing kits based on the solar fridge Steca PF 166 were introduced. In 2013, shop and kiosk owners bought refrigeration kits to improve their businesses. Refrigeration kits also introduced for fishermen to produce ice to cool their fish and subsequently transport them in cooling boxes to the cities. Fishermen achieved higher margins because they were now able to sell fresh fish in the cities
Small wind turbine construction Assembly and balancing
Rural settlement in Handew Electrification of a local shop
Rural settlement in Handew Electrification of a local shop The grid in rural areas Power cuts for 1 or 2 hours per day Lack of appropriate transformers Electrification only of major towns
Off-grid electrification system System loads and electrical diagram 2.3kWh per day at 4m/s 500W rated power (instantaneous 1200W) 1.3kWh per day Jijiga - Jan 2015 1.6kWh per day at 23% DOD
Small wind turbine Preparation for erection
Small wind turbine 3m rotor diameter at 12m hub height
Photovoltaic panels 2 x 150W polycrystalline panels 24VDC
Installation of off-grid system Batteries, diversion load charge controller, inverter, data logger
Case Study: Neu-Ulm University of Applied Sciences (HNU) Applied Entrepreneurship Education Programme (AEEP), Ethiopia Project description The project focuses on entrepreneurial education with the objective to create job opportunities. Micro entrepreneurs were trained to build and maintain prototypes for diverse kind of businesses such as for productive use of energy businesses. 8 Business Opportunities with Solar Systems (BOSS) models were developed and constructed 1) barber shop, 5) mobile city photography shop 2) cafeteria, 6) ICT training center 3) charging station and 7) rural mobile photograph 4) ice cream shop were developed Project financing and costs Funded by German Federal Ministry of Cooperation and Development. The program has a financial revolving mechanism. Micro entrepreneurs get materials for building the prototypes and are obligated to pay back all costs including a small extra fee within 2 years to the Arba Minch University, so the university can refinance the program with the repayments.
Case Studies 2 more needed (4 in total) for Reporting Need to get more information on specific costs and implementation plans Which are suitable in Malawi? Which are suitable in specific CBOs? Ideally have some feasibility studies with implementation strategies. Need to get Load Profiles
Example Energy Consumption (Small and Micro Enterprises)
Example Energy Consumption (Appliances)
Supply Options and Costs
Market Research for PUSPV
Productive Use Survey Household Survey Business Survey For the following services, how willing would you be to pay for the following services? Extremely Very Somewhat Not very Not at all 5 4 3 2 1 Make it clear we not offering any funding for new businesses How successful do you think the following businesses would be if established in this area? By successful we mean profitable. Extremely Very Somewhat Not very Not at all 5 4 3 2 1
PU Survey Options Battery charging Tailoring - Electric sewing machines, Dressmaking Cold drinks refrigeration (coke, beer) Agricultural Refrigeration (Fish, meat, milk) Entertainment TV and Music Mobile phone charging Barbershop Electronic Repair Electric Fencing Maize Mill Water pumping for irrigation Water pumping for potable water Chicken incubation Internet café and IT services Printing services (photo printing, photocopying, document printing) Wood workshop (Carpentry, furniture making) Metal Workshop (grinding, drilling, welding, locksmith, blacksmith) Shop lighting Other (please specify)
Business Model Canvas
Key recommendations for PURE: Raise awareness for PURE, which is the least cost option over its life cycle, through communication campaigns, with a particular focus on the return on investment generated by renewable energy installations based on sustainable business models; Facilitate access to finance for small and medium-scale PURE projects which could be replicated and scaled up by increasing the overall budgets available for this and in particular for upfront investments, allowing small ticket sizes and stimulating the bundling of projects where appropriate, also taking the gender bias into account; Stimulate clean rural electrification through PURE projects in particular with a clear, efficient and supportive policy and regulatory framework; behavioural change requires at least a level playing field for RETs and is further facilitated if incentives are more attractive; Facilitate private sector investment in small and medium-scale PURE projects, by helping to reduce the (perceived) risks on the regulatory, technological, political and market development level, as well as by taking part in financing e.g. through grants and soft loans;
Key recommendations: Support local capacity building and training, especially to start and run a business, as well as to work with the renewable energy installation; Highlight the importance of sharing experience and best practices both on the political-institutional and the industry level, and work with established sector partners and stakeholders; Engage with the local community and NGOs when developing programmes targeting the spread of PURE to better understand and support local needs and increase local acceptance, whilst integrating the feedback into a holistic approach to stimulate local economic development; Consider a more systematic and market-near approach by facilitating the understanding of the local energy market and its outlook for potential market participants, and avoiding the distribution of energy systems without any reciprocal commitment in order to focus on quality and cost-effective renewable energy solutions.
Further Reading Productive Use of Energy PRODUSE A Manual for Electrification Practitioners The Productive Use of Renewable Energy in Africa
System Design
System Diagram
Elements of a Standalone System PV Array Charge Controller Inverter Battery DC Loads AC Appliances Tom Hooley v3power.co.uk
Resource Data Irradiance data at a tilt angle to optimise the energy capture during the worst case or design month is required. This is most easily obtained from the internet. A recommended web site is for Europe and Africa is: http://re.jrc.ec.europa.eu/pvgis.
Financing PUSPV Case Study: Mosaic online solar marketplace connecting investors with solar projects in need of financing Interested people can create an account which allows them to browse through a list of investment projects Once the projects are operational and generate revenues the investors are being paid back their capital over a certain period plus interest. Interests achieved are in the range of 4.5 to 6.5% annually. The minimum investment is US$25. The project sizes range from less than 50kW to more than 1MW. The information on the webpage informs about the interest people can get and the term of investment. Currently only for projects in USA but could be a good option for Malawi "people enjoy that they can invest in projects that they can see, which is giving them a good feeling to have invested their money in something useful and environmentally friendly. If they want, they can even visit the locations. Many investors are excited about the transparency, tangibility and social and environmental impact."
Financing PUSPV Case Study: Mosaic joinmosaic.com